Ninety percent of those affected are women, and after mistakes by the Department of Labor and Pensions, a total of £ 1 billion is owed, research shows
Forty thousand British pensioners have died unaware that the Department of Labor and Pensions owed them thousands of pounds due to botched government pension calculations.
The government’s “really shocking” failures were exposed in a National Audit Office investigation, which released its findings today.
It concludes that a series of “human errors” by DWP employees in 1985 resulted in at least 134,000 retirees not receiving their full state pensions. About 90 percent of those affected are women.
These retirees are still entitled to more than £ 1 billion, with the average underpayment estimated at £ 8,900.
However, around one in eight arrears to date is £ 40,000 or more, with the largest error identified to date being an underpayment of £ 128,000.
And experts warn many families of retirees who died while money was still owed that they might never see a dime because the DWP is destroying records after four years.
The scandal was originally raised in early 2020 after LCP partner and former retirement secretary Steve Webb and This is Money’s retirement editor Tanya Jefferies began posting stories of elderly and widowed retirees to whom the government owed tens of thousands of pounds.
The problem relates to the “old” state pension system, where married women who had a poor pension themselves could claim a 60% state basic pension based on their husbands contribution statements.
The DWP admitted its mistakes but could not say how many people were withheld from thousands of pounds – a sum that, in many cases, would have made a significant difference to their quality of life. As a result, the National Audit Office agreed to examine DWP’s records.
The results indicate that around 90 percent of those affected are women and of the 134,000 underpaid identified, only 94,000 are still alive and able to receive their back payments
About 40,000 underpaid retirees have died despite payments to be made to their family or estate. However, DWP also identified around 15,000 cases where it is considered unlikely to trace the retiree or heirs.
Mrs. Jefferies related I: “I spoke to many of the women affected and their loved ones while investigating this and the reactions ranged from shock to anger to numb silence when I told them DWP would pay them tens of thousands of pounds.
“In one case, I was the one to tell a son that his mother, who is in a nursing home with dementia, would receive well over £ 100,000. She will never find out about it.
“Just think of what people on low government pensions have failed and missed over the years thinking they couldn’t even afford a coffee with friends or a family meal, much less a vacation abroad. You deserve better from the government. “
Speak with Isaid Mr Webb that today’s report underestimated the extent of the error.
“The NAO report highlights that widowers and some widows with a full basic pension but never being awarded the inherited ‘additional’ state SERPS pension that they should have received are not among the 134,000 underpaid applicants they already have identified, ”he added.
“These people will only be picked up during a scan in November 2021, which means there may be thousands more widowers and widows with millions in debts that have not yet been counted.”
Also, because the DWP destroys personal records four years after an applicant dies, tens of thousands of families eligible for reimbursements, sometimes in excess of £ 100,000 per person, may never see this money.
“Those who have died and whose spouse also died more than four years ago will never be identified unless the families have DWP papers or bank statements before that date and come forward to file claims,” added Mr. Webb added.
He warned that relatives hoping for money may have to wait. “DWP still does not have an agreed plan for dealing with deceased cases or identifying the next of kin,” he said
“Worryingly, even in the ‘correction’ exercise that DWP has done so far, they initially got about one in eight calculations wrong.”
Tom Selby, AJ Bell’s pension expert, called the revelations “nothing less than a national scandal” and said people “deserve answers”.
“Once the compensation has been paid, the government must thoroughly review its processes to ensure that these mistakes are never repeated. It will inevitably take years, if not decades, to rebuild the trust that was lost as a result of this failure. “
Tom McPhail, director of public affairs for financial advisory firm The Lang Cat, added, “After the high-profile communication flaws surrounding the Waspi women, and now DWP has some hard work to do to restore people’s trust.”
UK taxpayers will bump the bill for 36 years of government errors, with DWP confirming it will hire 544 people to check for underpaid state pension cases, costing £ 24.3 million.